Chances are you already own some precious metals. Maybe you have a gold necklace, a silver watch or even a platinum ring. You probably know that these precious metals can be expensive -- but did you know you could be making money on them, too?

You can invest in several different precious metals: gold, silver, platinum or palladium. Such investments can take a variety of forms, including bullion (bars), coins, jewelry, futures, stocks or mutual funds [source: ThinkQuest]. One of the safest ways to invest in precious metals is through mutual funds. Mutual funds have a fund manager who invests your money into specific stocks and bonds, letting you diversify your investments without a lot of work on your part.

Just as you're more likely to have gold or silver in your possession than platinum or palladium, gold and silver mutual funds are more popular than other precious metals. By investing in a precious metal mutual fund, your investments will have less risk and volatility than they normally would if you were investing in coins, jewelry or bars. However, as with any investment, you should think and discuss your options with an advisor before buying a mutual fund because there are always risks with the unstable market.

Gold­ and silver look good, but why does that mean you can make money investing in a precious metals mutual fund? There's more to gold than bling-bling. Read on to find out why investing in precious metals mutual funds can be a lucrative idea, especially in a downward economy.

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Platinum's Part

Though gold and silver jewelry is common, what about other precious metals, like platinum and palladium? If you own a hybrid car or truck, platinum or palladium may have been a part of its manufacturing. Hybrid cars and trucks built with internal combustion engines use platinum group metals in their production, while hydrogen vehicles use platinum to convert hydrogen to electricity [source: Lifton].